Want to know how the retirement sausage is made? Here is my family secret recipe for getting ready for retirement! No matter if you are 52 or 72, calling this transition time in your life “retirement” or “passive income” …. The key ingredients have not changed much in the last 30 years. Everybody has a unique situation when it comes to planning for retirement, so this list is mean to be a general list of the basic that apply to most Americans. Some items will not apply to you. Some items you need are not listed. I know this. But everyone can benefit from having some kind of framework to launch into a conversation about your Retirement Readiness and begin carving out the path to your unique definition of retirement.
Kim’s Famous Ready-to-Retire Checklist:
Income Strategy: Develop a retirement income strategy that is sustainable (ie: make sure you don’t run out of money). This should include Social Security retirement benefits, company sponsored qualified retirement plans, company sponsored deferred compensation, stock options, self-employed SEP IRAs, Traditional IRAs, Roth IRAs & non-qualified investment portfolios. Retirement income can be both passive income and active income depending on how your structure your income plan.
Pensions: Gather pension information from all previous employers. Investigate the spousal & non-spousal survivorship options and know the long-term impact of these choices before you decide on a pension option.
Social Security Retirement benefit review: Review SSA retirement benefits statement online at www.ssa.gov for errors & apply for corrections if necessary. Review projections for taking benefits at your normal retirement age versus vs taking the benefit early versus delaying the benefit. Also take into consideration SSA retirement benefits you may qualify for from a spouse, ex-spouse or deceased spouse.
Medicare: At age 65, enroll in Medicare Part A & B, no matter if you are planning to take benefits or delay. Learn about Medicare Part D and decide between Medigap vs Medicare Advantage policies to fill the gaps.
HSA Plans: Stop making HSA contributions if you elect to begin Medicare. Using the funds accumulated, start to budget for common qualified expenses such as chiropractors, dental treatments, eyeglasses, prescriptions, qualified LTC insurance, COBRA, Medicare deductibles & other qualified insurance premiums.
Taxes: Discuss tax maximization strategies with your tax advisor for potential Roth IRA conversions between retirement and your Required Minimum Distribution (RMD) age.
Long Term Care Insurance: Do a “long term care fire drill” and discuss the need for long-term care insurance vs self-insuring.
Legacy: Review all beneficiary designations for retirement plans, insurance, and investment portfolios. Review account ownership for all liquid assets & real property, both personal and business holdings.
Legal: Get your legal documents & estate planning updated. This should include choosing a qualified person to be “in charge” when planning for end-of-life care, ongoing financial assistance, and estate transfer to your heirs.
Kimberly Enders CFP® CWS® CERTIFIED FINANCIAL PLANNER™
Enders Wealth Management
37800 Van Dyke Ave, Suite 125
Sterling Heights MI 48312
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